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Fungus in Rs 230 butter pack: Panel orders Rs 2L payout, refers case to FSSAI

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SAURABH THAKUR

October 31, 2026
Fungus in Rs 230 butter pack: Panel orders Rs 2L payout, refers case to FSSAI

A Hyderabad consumer commission has ordered a retailer and manufacturer to pay Rs 2 lakh in damages after a woman found fungus in a butter pack. The case has been referred to the FSSAI for further regulatory investigation into food safety standards.

Consumer Victory: Hyderabad Commission Rules on Food Safety

A recent ruling by the District Consumer Disputes Redressal Commission-II in Hyderabad has brought the critical issue of food safety and supply chain accountability to the forefront. A consumer discovered visible fungus in a packet of organic cooking butter, a product marketed for its health benefits, which led to a legal battle against both the retailer and the manufacturer. The commission's decision to order a Rs 2 lakh payout serves as a significant precedent for consumer rights in the food industry.

Accountability in the Supply Chain

The commission, led by President Vakkanti Narasimha Rao along with members P V T R Jawahar Babu and Suma Vala, identified a collective failure in the product's lifecycle. The judgment specifically highlighted that the manufacturer failed to monitor the critical storage conditions and temperature requirements necessary for maintaining the integrity of organic products. By placing the product in a retail outlet without ensuring proper cold-chain management, the manufacturer directly contributed to the contamination detected by the consumer.

Defining Unfair Trade Practices

Beyond the physical presence of fungus, the commission categorized the incident as both a deficiency in service and an unfair trade practice. This legal distinction is vital; it suggests that the responsibility for food safety does not end at the factory gate. Retailers are legally bound to uphold storage standards, and manufacturers are obligated to oversee how their products are handled by third-party vendors. The ruling mandates a refund of the Rs 230 purchase price, alongside substantial compensation for the consumer’s mental agony.

Regulatory Implications and FSSAI Involvement

Perhaps the most significant outcome of this case is the referral to the Food Safety and Standards Authority of India (FSSAI). By escalating the matter to the national food regulator, the commission has signaled that this is not merely a private dispute but a public health concern. The FSSAI is now expected to investigate whether the contamination was an isolated incident or the result of systemic lapses in the manufacturer's quality control protocols.

Broader Consumer Trends

This case reflects a growing trend in India where consumers are increasingly utilizing District Consumer Disputes Redressal Commissions to hold corporations accountable. The decision to order Rs 50,000 in punitive damages, to be deposited into the consumer welfare fund, acts as a deterrent against corporate negligence. As the demand for organic and premium food products rises, this ruling serves as a stark reminder to manufacturers that brand reputation is inextricably linked to stringent safety compliance.

Future Outlook

Moving forward, the industry must prioritize transparency in logistics and storage. The scrutiny applied by the Hyderabad commission indicates that courts are becoming less tolerant of 'storage issues' as a defense for contaminated goods. For the food sector, this sets a high bar: if a company markets a product as organic or premium, they must ensure the entire journey from production to the consumer's table remains untainted, or face significant financial and regulatory consequences.

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